Über Handelswiderstände

Normative approaches toward international trade policy continue to be based on the neoclassical equilibrium analysis of international trade which excludes not only transaction costs of markets from explicit consideration but also fails to consider the costs of establishing and maintaining institutions of trade. The paper proposes to amend these deficiencies by recurring to D.C. North’s definition of „production costs“ as the sum of „costs of transformation“ and „costs of transactions“; it also suggests a general concept of „trade resistances“ (the importance of which has been emphasised recently, among others, by researchers like Drysdale or Milner). Although formally they might be treated like the effects of an ad valorem tariff, institutionally determined trade resistances cannot be assessed ex ante in terms of their welfare consequences, because knowledge about their structure can only be attained after a realisation of transactions. Furthermore, changing trade resistances involves political transaction costs. Institutional change in international trade, therefore, cannot follow trajectories of global optimisation but is governed by the local optimisation strategies of political entrepreneurs; the entrepreneurs pursue individual goals when supplying institutions. Institutional change engendered by their actions can only be assessed by reference to the subjective perceptions and mental models of trade (policy) on the part of the economic agents affected. Thus, institutional change is path-dependent by necessity.